Follow Us on Google
By Adewale Sanyaolu
Nigerians should brace up for tougher times as a new regime of 7.5 per cent Value Added Tax (VAT) on selected banking services, including mobile bank transfers and USSD transactions, takes effect from January 19, 2026.
According to a notice sent to customers on Wednesday afternoon by Moniepoint, the development is tied to a directive from the Nigerian Revenue Service(NRS), mandating financial institutions to begin VAT collection and remittance on certain electronic banking services
The notice reads in part, “We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT),” the notice stated.
It added, “From Monday, 19 January 2026, we are required to collect a 7.5 per cent VAT, to be remitted to the Nigerian Revenue Service (NRS) (formerly known as the Federal Inland Revenue Service).”
Recall that bank customers had, on January 1, 2026, expressed growing frustration following the announcement from banks that the implementation of a new tax framework had shifted the burden of electronic transfer levies to senders, a move that many fear will further raise the cost of everyday digital transactions in Africa’s largest economy.
Under the Nigerian Tax Act, which took effect on January 1, 2026, a N50 electronic money transfer levy on transactions of N10,000 and above will now be deducted from the sender’s account rather than the recipient’s.
Banks have begun notifying customers ahead of the rollout, framing the change as a regulatory requirement rather than a new fee.
Other News
In a notice sent to customers, Access Bank said the levy would “no longer be charged to the recipient but will now be deducted from the sender’s account,” adding that all taxes would be “duly remitted to the Federal Government in line with regulatory requirements.”
While the amount may appear modest, the shift has sparked widespread criticism, particularly among Nigerians who rely heavily on frequent digital transfers to support their families, pay bills, or conduct small-scale business transactions.
Many customers argue that the levy, when combined with existing bank and fintech transfer charges, represents another incremental squeeze on household finances already strained by inflation and currency weakness.
The policy change effectively reverses a long-standing practice under which recipients bore the levy, often receiving less than the amount sent.
From 2026, recipients will receive the full value of transfers, a development welcomed by salary earners, small traders and families dependent on remittances. However, the visibility of the deduction on the sender’s side has amplified public discontent.
The backlash has been particularly vocal on social media, where users describe the move as another example of “hidden taxes becoming explicit” in Nigeria’s increasingly digital economy.
Some fear the added friction could push users back toward informal cash transactions, undermining years of progress in financial inclusion and electronic payments.
Also, for Nigerians in the diaspora, the change introduces another cost layer in an already expensive remittance chain.
While international transfer fees and foreign-exchange spreads remain the dominant expenses, the N50 levy applies once funds are credited into Nigerian accounts, meaning overseas senders will ultimately absorb the cost on qualifying transfers.
